The mission of The Crafts Report is to inform, instruct, and inspire both the beginning and the established professional craftsperson and crafts retailer. Here are some of the best insights from this past year.A Artistic DevelopmentNew designs are really key to driving sales. I have a few that sell over and over, and I keep making them. But new work creates excitement for the customer and the sales people. And, it keeps me excited about making jewelry.

Follow your bliss. It sounds like the biggest cliché, but I can't stress how important it is to follow your dream, to never give up. When I was starting out, all my extra money went on tools and materials. It was a tight time for me--no vacations, no extra luxuries, that's for sure. But I kept contacting people and kept trying to get my work out there, until it really was in front of the right audience.

It does take a creative approach to life to grow a business based in craft, but it can be done. - Gail GoldenB Barriers to SalesThere is really only one reason why a customer will not buy something that they really want: fear. They might be intimidated by the price, believing that it may be more than they feel they can spend, or they may be anxious that the item might not be worth what they paid. There are numerous ways you can help a customer overcome their fear of price, such as buyer incentives, credit plans, trade-up or trade-in offers, product warranties, and value comparisons. Some customers may be worried that they will later regret a purchase, and that fear of making a mistake keeps them from buying. A customer may love an item, but they might be scared to buy it, because they lack confidence in their decision. To help a customer overcome these anxieties, it's important to help them feel a sense of validation of their judgment, which can provide them with the unconscious sense of permission that they may need to justify the purchase. - Annie StrackC CollaborationYou should seek the input of other artists. No matter what level of acclaim you reach as an artist, there is always something to learn about the work, the challenges of running a business, marketing, or networking.

Find a group of "kindred spirits" who can sustain you during productively down periods, help you reach a broader group of potential customers, or contribute to special projects. I can work alone, but I also like to have a steering committee for specific events or programs. Usually, no fewer than four people, but no more than eight is ideal.

Release your inner "control freak." You do need a leader to make things happen, but it is so much more productive to solicit opinions and ideas and then figure out a way to implement them. It always makes for a better end result. - Heidi HammelD DisplaysDisplays are difficult to discuss, because every product is different. Some items need to be behind glass with bright lights shining on them (such as jewelry). Some items need to be dangled from above. Some items need to be displayed on tables. But, in every case, the key ingredient is visibility. It may seem obvious, but if the customer doesn't see the product, and see it quickly, then it doesn't exist.

Consider the power of a vertical display. Items that are displayed where the eye can sweep over them at a glance--and see the entire selection--are far more likely to result in higher sales.

Keep your shelves full. It's a strange element of show psychology, but customers who see half-empty shelves are not impressed by how well your product has been selling. Instead, they will glance at your nearly vacant display, and walk on. It doesn't matter how many pieces you still have on display. Half-empty shelves equal "no selection" in the eyes of a potential customer. - Patrice LewisE EfficiencyWhat could you do during your off-season to increase your efficiency during your busy season? We're taking the time during this year's slow season to build a "clean room" inside our shop--essentially a shop within a shop that will enable us to do certain steps of our manufacturing process without having to deal with sawdust and other byproducts of our production cycle. We can also heat a smaller room with greater efficiency than we can the entire shop, making it much more comfortable to work during the bitterly cold winter temps. We've been meaning to build this "clean room" for a long time, and this year's slow season is the time to do it.

What kinds of neglected projects can you embark on that will increase the efficiency of your production cycle? Perhaps you can get your sewing machine cleaned and oiled. Perhaps you can install the photographic light box you've always meant to do. Perhaps you can finally take the time to research out a better quality batting for those quilts. Whatever it is you choose to do during this time, make sure it has a positive impact on the bottom line for your craft business. - Patrice LewisF FlexibilityIt's critical for artists and retailers to be doing everything right. It's unfortunate when a really great artist quits. Sometimes, the reason they didn't make it is because of the way their work was presented. Other times, their work was just not right for society--there is always art that is more salable at a particular time. There are so many different scenarios. You must continue to do what you have to do to be at the top of the game.

Eric Lee, a new artist who does backpaints on glass, had a backwind at his first show, and all of a sudden, there was broken glass everywhere. But he didn't give up. He asked people at every show what he should be doing. Now he is making a huge six-figure income. You can never just keep doing it the way you did last year. Just when you think you are at the top of your game, you need to push yourself ahead. You always have to look for new angles and challenge yourself. - Amy AmdurG GalleriesIt is easier than ever to set up a new gallery retail space. Downtown shopping districts and shopping malls have, in many cases, more empty than occupied shops. Resourceful entrepreneurs are figuring out that these unoccupied spaces present a great opportunity for a new retail space.

Unlike years past, the potential renter has a lot of leverage: the mall hates having an empty store, as it looks bad, plus they'd rather get some rent rather than nothing. Also, local crafts draw more people to the mall. So, it's often possible to rent a nice store for less than what it used to cost for a 10-foot-by-10-foot kiosk. There are many details to work out:

How much will it cost to rent the store? Is there room for negotiation?

How will the store track sales reliably for each artisan?

What will monthly expenses be, and how will we be sure we have adequate revenue to cover them?

Who will manage the store? Who else will work there?

Will artisans work in the store? How will they be compensated?

How will the sales people (possibly including artists) learn how to sell the products?

Where will fixtures come from? Who will do display work?

There has to be one reliable person to manage the store, and that person must be paid. You will need additional paid employees who rotate, with more staff added in December for holiday sales. - Patti DowseH HandmadeThere are a number of techniques you can use to broaden and expand your handmade business, even in this economy.

Think about ways your product can be modified to appeal to a broader number of people. One of the reasons T-shirt vendors do so well is because they can cross-market their products under virtually any condition by putting appropriate slogans or pictures on their T-shirts. While not every product is quite that adaptable, think about how you can tweak your product to make it more interesting to people outside of your normal market.

For example, I've seen women who sew teddy bears start making teddy bear outfits that appeal to everyone from little girls to tough leather-wearing motorcyclists (think about a teddy bear with leather and chains and you get my drift). Can you make your quilts with different themes, i.e. tractors or antique cars or ballerinas? Can you put a picture of a spangled singer or a starship on your handmade candles and take them to an Elvis or Star Trek convention?

Here's something a lot of people fail to capitalize on with their home craft product: the fact that they're made in America. Yes, there really are a lot of people seeking items that are not made by huge factories in China. Your job is to find those people.

What about the "greenness" of your craft? Are you particularly skilled in working with recycled materials, reclaimed supplies, or other aspects that may be interesting to those with environmental concerns? It behooves you to capitalize on anything marketable. - Patrice LewisI InsuranceCommercial general liability insurance, often referred to as, simply, liability coverage or public liability insurance, protects the insured vendor against liability lawsuits or claims, from a third party, for bodily injury and property damage arising out of the vendor's premises and operations. Defending yourself against and paying for a liability claim is expensive. For example, if your art is displayed in a booth at a craft show and a shelf of pottery happens to fall and injure someone, your liability coverage will pay your defense costs and cover claims within the limits of the policy.

If you're at an outdoor art fair and your tent collapses, damaging another vendor's artwork, your liability insurance will respond. Or perhaps an unattended child wanders into your booth, trips on an electrical cord, and the parent demands that you pay for medical attention; again, your liability insurance will protect your business. Liability insurance not only pays for damages you are held legally liable for, but also covers the cost of investigation and defense of claims, even if they are groundless.

In addition to liability coverage, artists selling their work at arts and crafts shows may want to consider inland marine coverage, sometimes called equipment and contents coverage. This provides coverage for direct loss of or damage to the vendor's inventory (although fine arts and jewelry are usually excluded), trailers, equipment, and portable storage units due to fire, theft, vandalism, or other covered causes of loss. - Lorena HatfieldJ Juried PhotosWithout exception, any digital camera, big or small, when carefully used, can produce perfectly good jury submission images. All of the super-state-of-the-art refinements and features in modern cameras are designed to solve the problems of difficult shooting situations, such as fast-moving sports events. Because craftspeople shoot their pictures under controlled situations, with small studios and fixed lighting, even a camera with simple exposure and focus controls and a limited zoom range will work just as well as its high-end brethren.

Of course, carefully lighting and framing your craftwork is critical for good jury submissions and web shots, but you really do have to learn to use photo editing software. The easiest photo editing software to use, and the cheapest (it's free), is Picasa 3 from Google, available at www.picasa.com. Although it is pretty intuitive to use, there are tutorials and discussion groups at the Picasa site, and YouTube has instructional videos. The software can do most everything you need.

The first step is to correct exposure errors if your nice white background looks gray, or the craftwork appears muddy or dark. The Color Temperature slider and the Neutral Color Picker are two tools to help you get accurate color balance. You can also crop and resize images exactly how you want them. Images for use on the web are very small, typically less than 200KB (or .2MP). Some jury submissions ask for ZAPP (and CaFÉ) images, which are 1900x1900 pixels and saved as files no bigger than 1.6MB. - Steve MeltzerK Knock-OffsMore and more, I am encountering artists who are telling me that someone has copied their designs. This is probably true, as when the economy gets tough, many people turn to any means to increase their sales. How you react when someone copies your designs (better known as being knocked off) is the important thing.

I believe that too many artists have the wrong attitude when their designs are ripped off. It does feel like a violation, because it is, and I know how that feels first-hand, but the usual reaction is not conducive to business growth. When you pull back and become protective of your designs, you cut off valuable awareness of your work. Rather than take the turtle approach that has very limited rewards, I would encourage you to celebrate the next time you get knocked off! When someone copies your designs, that person is telling you that you have "it!" The more "it" you have, the more people there will be to knock you off. If your designs weren't good, they wouldn't be knocking you off. Use this information, and don't react by crying, "Foul." Be proactive and use this information as fuel for creating more new and innovative designs. Someone can only steal what you have done; they cannot steal the designs that are in your head. It is so much more empowering to see knock-offs as positive and a win than to see them as a violation and a loss. A knock-off can be a gift if you hold it in a positive light.

With the amount of time and money involved in taking someone to court, you could create three to five new designs. Think how much more productive and fun it would be to say to yourself, "Wow, those people ripped me off! I must be really good at what I do. Now, let me show them by making something that involves talents and techniques that are not as easily reproduced."

If you can change the way you think about those who will knock you off, and, more importantly, how you will react to the situations, I think you will find power and motivation in what is inevitable every time you have a great idea. To dwell on the violation will only lead you to feeling like a victim. It is so much better to see each knock-off as an accomplishment that moves you up the food chain. If the work wasn't good, no one would want to steal it. - Bruce BakerL LoansFinding the money for a start-up small business is not easy. It's not supposed to be easy. If it were easy, everyone would be doing it. Like anything worth doing, it usually requires a complete philosophical change from immediate gratification to deferred rewards.

If you're a first-time hobby-into-business entrepreneur, don't ever, ever, ever go into debt to finance your home business. Aside from the idea that going into debt is questionable to begin with, there is the very real possibility that your business will fail in this economy, and then you're left with the bitter regret of a failed business and heavy debt to boot.

Give yourself time to develop your customer base, increase the speed and efficiency in making your product, and develop your marketing knowledge. Don't sink yourself into debt getting started because of wishful thinking or misplaced optimism. Obviously, you'll need the raw materials and tools to make the product, but work your way up toward better items as you begin to bring in income. - Patrice LewisM MerchandiseProduce options at several price points to build a customer base. I offer everything from single beads that are priced from $5 to $85 to elaborate, custom-created pieces of jewelry that can cost up to $3,000. Those who buy in at a lower price point often later purchase more costly pieces. The spectacular art pieces show your artistic best. But it is so important to have something that anyone could take home and appreciate.

Consider working with others to expand your creative vision. Earlier this year, I began working with Peggy Potts--"a wonderful silversmith"--on a collaboration based on our mutual admiration of the work of Spanish Catalan architect Antonio Gaudi. We met weekly to compare ideas and interpretations for their piece, and then began the work of balancing colors, design elements, and wearability. What resulted was a stunning piece recently accepted for a juried show in Louisville and a new area of inspiration to explore. We both feel an almost strange sense of awe of what we created, and that is an incredible feeling. - Nina "Sam" NiblerN NegativityAt the last show I went to as a customer, it struck me that quite a few artists were complaining about almost everything--the show, the location of their booth, the customers, the parking, etc. Now, to be fair, some of them knew I was a fellow artist and wrote for this publication. They got a pass, because they were venting with a colleague. I was surprised, though, that many artists were talking the same way in front of me when they thought I was a customer. That negative energy won't boost sales!

I'm a big believer in cognitive behavioral therapy (CBT), which is basically a retraining of your negative thought patterns. You learn to recognize and replace a non-productive thought with a more positive, realistic statement. Instead of thinking, "I'll never be smart," you say, "This is something that's difficult to understand." That shows a shift from negative thinking to a more balanced view. Making incremental shifts in thinking patterns toward more optimism is a great overall strategy.

Sometimes, it's hard to not get sucked into the sales-are-down-and-I'm-worried mode. Reiterate that you have new challenges, but that you're hopeful for a better sales cycle. Maybe some of your positive energy will rub off. You may have to make some tough choices about whom you want to be around. There are people who are simply very toxic to our lives. I call them the "black holes," because they suck you in with so much energy-expending negativity. You begin to feel yourself drained and tired around them. Resolve to distance yourself from those folks. Surround yourself with people who enhance your life. - Nancy LaFeverO Online SalesEntrepreneurs need to get as much marketing bang as possible from their online presence. It's your dollar, after all. You can spend it well, or you can spend it badly. I'm all about spending it well. Here's my personal website marketing philosophy, and although this is true for any website, it's especially true for those of us marketing and selling wares directly to our customers: Your website may be about you, your company, and products, but it's for your visitor.

Think about it for a moment. Every visitor who comes to your site (and hopefully says to themselves, "Yes, I'm in the right place!") wants to do something when they get there. They want to find something, learn something, browse something, and, for our purposes, buy something. We also, even if we don't get the sale right away, want to encourage our visitors to leave something of themselves behind. Commit to engagement. Use a newsletter, blog, and relevant social media to help visitors turn into prospects and prospects into customers. You'll also want to add a site search box so that visitors who know precisely what they're looking for can quickly determine if you provide it or not.

Make sure you write your content using the same words, terms, and phrases your best prospects use. This will also help boost your search engine rankings. Boost your rankings, and you increase your relevant traffic. - Roberta RosenbergP PricingWhenever you have hobbyists in the same marketplace with those who are using their art business to feed their family, you have a strange dynamic. Prices at retail fairs, and even one-of-a-kind exhibitions, are elastic. They go up when times are good, and they go down when times are bad.

We need artists to better understand the cost of making, and the cost of selling. When you under-price, you are hurting not only yourself, but also your neighbor. It's time that we consider coaching each other to higher prices. The lowest price is often not the best price. I've known many artists who sold slowly until they raised their prices. We are not a "price sensitive" community. Craft lovers purchase from passion and inspiration, not from a sticker price. If we are going to experience a period of inflation, artists must raise their prices accordingly. - Wendy RosenQ QuestionsSales start with a greeting, and it is your job as a seller to greet customers in ways that will get you "yes" and "thank you" responses from them. Any question that gets you a "no" or "just looking" response was not the right question!

For example, "Can I help you?", "Finding everything you need?", "Looking for anything in particular?", or "Can I answer any questions for you?" are not the right questions. These are all bad greetings, as the customers are likely to say, "No" or "No, thank you; I'm just looking!" If that happens, the sale has most likely been blown, and you created that dynamic by using the wrong words.

Getting the customer to say, "Yes" is the first step on the path of closing a sale. Better greetings start with other words, such as "If." "If I can help you, let me know" and "If you would like to try that on, please do so" are types of greetings that make you available, but puts the ball in the customer's court. It seems less pushy and relieves the sales pressure.

Wait for the customer to ask you a question before you start your sales pitch. Once a customer has asked a question, the door has been opened for you to communicate with them. No matter how uninformed or insensitive that question might be, see it like a traffic light turning from red to green. It is the point at which you can begin to sell the object.

A customer might ask, "Why are these so expensive?" or "How long did it take you to make that?" Never take anything a customer says personally; it is one of the first rules of being a good sales associate. If you take what they say personally, you will likely blow the sale. If you choose to answer these questions, focus on the benefits of your products. Find the benefits in your work by carefully evaluating your product line, and know what those benefits are. Explain how owning your work will enhance or change their life. Tell the customer what those benefits are and show that person those benefits while the customer is in your space (if they are something you can demonstrate.) - Bruce BakerR RejectionDon't hesitate to go after what you want. Don't be afraid to enter competitions or exhibitions. For a while, I was concerned that I might not be good enough or far enough along, and I feared rejection. One day, I decided that I really had nothing to lose and decided to submit my work to a new book titled Breakout! Your Pathway to Success. I knew that thousands of artists were entering and thought I didn't stand a chance. I not only was accepted, but the author, Brit Hammer-Dijcks, called to tell me that my mosaic would be gracing the cover. That was a great lesson for me: Go after what you want. It also helped me put rejection in perspective. Just go for it, and get out there and let as many people as possible see your work. The more exposure, the better. Never forget your primary motivation for creating your art. Acknowledgement and monetary success are certainly desirable, but your most profound reward comes from creating work and knowing that it is appreciated. That is still the greatest thrill. - Jacquie RidleyS StorytellingCustomers are more likely to purchase art after they've created a bond, or feel a relationship with it. Somewhere in the timeline of a work of art there is an inspiration, process, technique, memory, or goal to share," said Robin. "Stories can be shared in various ways, like in a sentence or small paragraph displayed near the art to spark dialogue. Once a painting is viewed, it becomes personal, and each gathers up their own story and perceptions of the art. The viewer has become involved, and perhaps now the work that initially appealed to their aesthetics also shares a common ground within." Sharing background information also enables the customer to be more knowledgeable about the art, which helps them to feel that their judgment is validated. This increased feeling of empowerment helps make the purchasing decision easier for them.

People love to stop to watch live demonstrations of artists and crafters at work, and groups of interested viewers draw more attention to your products and induce sales. If your craft is one that you can't demonstrate in your booth or gallery, consider playing a slide show or video of your demonstration on a digital picture frame or portable DVD player in your booth or showroom. If you can't go to your galleries to demonstrate in person, consider using a video phone service, such as Skype, to broadcast live from your studio. Gallery visitors will enjoy watching your creative process, and the ability to interact with you will help them appreciate your products even more. - Annie StrackT TrendsA handmade retailer must have a good inventory of salable merchandise. By salable merchandise, I mean the kind of merchandise that customers want to buy. Too many artists are creating work that customers might admire, but do not necessarily want to own! Herein lies the key: make art that people want to own, and your sales will increase. This seems to me to be what separates the wheat from the chaff and is the key factor in creating a successful creative business today.

Creating work that customers want to buy is a lofty challenge for sure, but it can be done, because I encounter artists who are having good sales every week. A bit of trend research can help you get to the core of what people are buying and will help you make art that is easier to sell.

Ever since the 1970s, American consumers have wanted art and objects of adornment so much that they were willing to buy just about anything we made. At the Rhinebeck Show in New York, the first American Craft Council show, customers wanted what we made so badly that they would go to the show office and have us paged if we wandered away from our booth for too long! That is unlikely to happen today. Throughout this period, many artists adopted the "belief" that they were entitled to make anything they wanted to and customers were obligated to buy it. And at the time, there were enough customers to make that paradigm work. (Of course, an artist is entitled to make anything they want or to make art for art's sake. But if you want to sell it, you need to consider the market forces, or you will end up with a huge inventory of your own work.) - Bruce BakerU Unique Value PropositionYour business should always have a unique value proposition. This is a statement of what only your company can say about its products/services that your competition can't. Make that statement your headline and/or tagline on your website, and then make sure all remaining copy, copy elements, formatting, etc. underscore and promote that single idea for the prospect. This is your core marketing message, which is all about the prospective customer and what they need, want, and are looking for.

Use this as a jumping point to craft a headline and focus for your content. Remember, you're not shooting for clever; you're shooting for clarity and differentiation that quickly answers the visitor's main question: "Why your company and not some other retailer or artist?" - Roberta RosenbergV VisibilityVisibility is a critical element in an artist's marketing success. Artists should commit to the craft show circuit for at least five years to gain a full understanding of its value to you and your artwork. The shows also help build a resume and allow an artisan to pare down market venues as his or her work and knowledge of the marketplace grows. Buyers respond to marketing consistency as a means of developing confidence in purchasing objects they like. And while it is never easy to consistently be juried into the same shows every year, it is important to keep your work visible whenever possible. Don't become discouraged if you don't get into a show. Keep applying every year, and to as many shows as you feel you can manage with your work.

You really can't survive without good digital images of your work. Good photography has always been the final step in transporting the objects we make to someone else's living room. But marketing aside, good photographs provide a wonderful means of sticking our egos in our back pocket and 'seeing' our work with an objective eye: the camera doesn't lie. Digital images also provide a historical record of our growth in design developments and personal aesthetics. - David EllsworthW WholesaleYou can justify a move from selling retail to wholesale if you can produce more product than you can sell yourself and if you are prepared to work more and perhaps employ staff to grow your business and in turn to earn more. You may get orders that can be spread over as long as six months, with the possibility for reorders if your items sell through for the retailer–big pluses for any small business. It is far easier to manage and service existing accounts than it is to generate new ones.

Before you jump into this there are two extremely important practical considerations. First, are you interested in making the same item again and again? Because that's what wholesale is all about. Second, do you have the financial resources to purchase materials and produce items to have in stock so when orders are placed they can be shipped in a timely manner?

If I haven't scared you away yet, perhaps you'll add two wholesale shows a year to your calendar. Typically, one of these would be in January or February, and the other in late summer.

The wholesale buyer is a different customer with very different needs and expectations. The most important thing to understand is that they're working. Buyers attend a wholesale show with expectations about how they will spend this money. They have a job to do, and you'll want to help them do it. It's easier to understand a line and to place an order in a booth that presents the product using the same visual stories the buyer would use to sell the items in their stores.

You'll want to complete your presentation with well-thought-out back-up materials. In addition to presenting product information, the wholesale catalog needs to spell out all the rules for doing business with you. The order form and any other materials you use also need to carry clear statements about your terms. Go online and search for these items. I also can't emphasize how important it is to visit a show before you sign up. While there, collect examples of selling tools you think would be helpful in designing yours. Most promoters are happy to have prospective exhibitors visit the show--it's how they sell space.

And finally a big warning: Once you sell at wholesale, you must always mark up any product that you sell at retail at least double your wholesale price. No underselling your wholesale accounts. - Donald ClarkX X ExperimentationEvolution as an artist is a never-ending journey. Experiment with techniques that are popular with other crafts. I am always looking at mixed media techniques to find new methods or supplies. Take classes with teachers that you admire and use their techniques, not their finished products, to keep your line fresh.

Don't be afraid to change what you are doing. If what you are making doesn't sell, revamp your product line or change mediums altogether. I went from painting to primitive dolls--neither of which paid the bills--to the wind chimes. - Elsa MikusY Your Best CustomersThe best marketing you can do is to your existing customers. It is the most important, and perhaps the most neglected, component of both retail and wholesale marketing. If you are not collecting an e-mail list, you are missing out on the most effective tool you have in your business toolbox. Encourage people to sign up at your point of sale. (See Bruce Baker's column in this issue for another great tip about your point of sale.) Many retailers or craftspeople who sell retail have told me how they will ask every customer for three things: name, e-mail, and birthday month. Birthday month? Of course. One of the best e-mail promotions you can do is to e-mail people a discount coupon that is valid only for the calendar month of their birthday. This practice alone has helped some people increase their revenue by 10-20 percent.

E-mail services are very inexpensive for small businesses. The two I recommend are MailChimp (www.mailchimp.com), which is free up to 2,000 subscribers, and Constant Contact, which costs $30 a month for your first 2,500 subscribers, but allows you to send them unlimited e-mails. Best of all, they will make sure your e-mails are all good addresses, make it easy for people to subscribe and unsubscribe, and keep you from being labeled as a spammer. - Ryan JonesZ Zero Discount PolicyDesperate large retailers have taught the consumer to shop "off price." The practice of offering goods at prices just above wholesale generates cash flow, but does little for the bottom line. On the other hand, it is smart to turn dated or unsuccessful designs back into cash so that you can purchase supplies and create more inventory. The trick is how to do this without compromising your price structure.

Perhaps the best of the not-so-best can be offered at a studio/seconds sale around the holidays with prices perhaps 20 to 30 percent off. Instead of giving discounts larger than that, try to find a more anonymous outlet for pieces that need deeper discounts. For instance, you could donate them to a charity auction where they will disappear among the many items offered and you either get a part of the sale price or a tax credit. Or look for craft schools that have fund-raising sales that pay the donor a percentage of the sale price (again, these usually take place at holiday time).As you work through this decision, keep in mind the brand you have built and avoid doing anything that will compromise that. And, unfortunately, this may mean some items end up in the scrap bin rather than selling at a discount. - Donald Clark

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